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Daimler AG to pay $1.5B to settle emissions cheating probes

Breana Noble   | The Detroit News

Mercedes-Benz parent Daimler AG reached a $1.5 billion deal with the Environmental Protection Agency and the state of California to settle allegations of diesel vehicles cheating on emissions testing.

The German automaker is the latest to face penalties from U.S. regulators after Volkswagen AG admitted in 2015 that it had installed secret software on U.S. vehicles to pass emissions tests but would allow vehicles to produce more nitrogen oxide than allowed at other times.

Daimler, according to the EPA, sold more than 250,000 diesel Sprinter vans and passenger cars that contained undisclosed emission control devices in their software that could pass successfully an emissions test but worked less effectively at other times. The agreement does not require Daimler to admit guilt.

"By concluding the proceedings, Daimler avoids lengthy court actions with respective legal and financial risks," the company said in a statement.

Daimler's deal includes an $875 million civil penalty, which is the second-largest under the Clean Air Act, according to the EPA. It also will pay $70.3 million in other penalties and has agreed to fix the affected Mercedes-Benz vehicles from between 2009 and 2016 at no cost to owners. The recall program is estimated at about $436 million. Another $110 million will fund mitigation projects in California.

“The message we are sending today is clear," EPA Administrator Andrew Wheeler said in a statement. "We will enforce the law. We will protect the environment and public health. And if you try to cheat the system and mislead the public, you will be caught. Those that violate public trust in pursuit of profits will forfeit both.”

The settlement is subject to a 30-day comment period and ultimately must be approved by the court.

Daimler in a statement on Sunday also said it has reached an agreement in principle to settle a consumer class-action lawsuit on the matter that is estimated at approximately $700 million.

Volkswagen paid $2.8 billion to settle the "Dieselgate" cheating scandal that affected nearly 600,000 vehicles, though repairs cost billions more. Fiat Chrysler Automobiles NV agreed in January 2019 to pay $800 million to settle allegation that the company used similar defeat device software on about 104,000 diesel-powered pickups and SUVs.

Twitter: @BreanaCNoble